B2B payments in the healthcare industry are undoubtedly complex, thanks to the intricacies of coordination between healthcare providers, suppliers and insurance firms. Adding to the headache is the sector’s typical burden of a high volume of transactions that flow via legacy and paper-based processes.
Well before the pandemic hit, however, the healthcare arena began to embrace the opportunities of digitization — at least, on the patient-facing end of operations. Telehealth services were already gaining traction, but the coronavirus crisis ushered in a wave of adoptions, and placed digital-first services front and center for many providers.
On the back end, however, many workflows — payments included — remain stuck in the past. For Ori Franco, chief financial officer at digital-first, female-focused healthcare service Nurx, the pandemic created an opportunity to initiate changes that were not previously considered as areas of potential optimization. As Franco recently told PYMNTS, work-from-home mandates have ignited a mindset shift in how work can and should get done in the finance organization, with plenty of potential to drive efficiency in a post-pandemic environment.
Remote Working Opportunity
As a proponent of fostering a tight-knit team, Franco was not necessarily an advocate of working from home before the pandemic hit. But once the crisis began and remote working was no longer a choice, he said he was not only able to keep back-office financial workflows moving, but could actually see the possible benefits of such a dynamic.
“What the pandemic has done is proven our ability to work more efficiently remotely,” he said. “Previously, I think the view was that we needed to be together in a close location.”
The shift wasn’t necessarily seamless, and certain changes had to be made to ensure that operations weren’t unnecessarily disrupted. Like so many other organizations, B2B payments strategies had to be adjusted with personnel who were unable to physically work in an office space to send and receive paper checks.
In the accounts receivable (AR) function, Franco noted that Nurx implemented lockboxes in order to centralize the receipt of paper checks from insurance companies. But on the accounts payable (AP) side, the company also saw the opportunity to shift from checks to digital payment methods to pay vendors.
Though B2B payments digitization can be valuable for organizations across industries, in the healthcare space, such a high volume of transactions with multiple stakeholders means electronification can yield an especially large impact.
“Not only are payments in the industry complex, but we deal with millions of payments a year,” said Franco. “Getting data from the insurance companies — 50 percent of our patients pay with insurance — into our systems and reconciling that data is quite complicated.”
Prioritizing Data Connectivity
The shift to digital payments and lockbox solutions set the stage for Franco to take digitization a step further and accelerate another trend that has grown even more important amid the pandemic: data integration.
In addition to the data stemming from incoming and outgoing payments, Franco said he saw the need to embrace a cloud infrastructure to manage data across the back office. Digitization in the healthcare sector is on the rise as more B2B FinTechs and platforms come to market, he said, but that doesn’t mean data challenges are automatically overcome.
“There are all sorts of companies out there that help manage the back-office or administration of working with insurance companies,” he said. “But the problem is, those companies are not integrated with our ERP or other systems.”
As such, Franco takes a diligent approach to third-party FinTech adoption, prioritizing the ability of any solution to integrate data within the back office. The focus on data connectivity has become so vital to the finance organization, he said, that he’s hired two systems professionals within the finance function to specialize in integration.
“That’s not something you typically think about from a finance organization,” he said. “The focus is on real-time transactional data, and making sure we take manual processes out of reconciliation.”
As the healthcare space broadens its support for telehealth and other types of remote services, digitization continues to be at the forefront of the sector’s evolution. The back office, however, has needed some time to catch up. Thanks to the pandemic and work-from-home requirements, Nurx is one of many firms recognizing the potential in digitization beyond merely navigating the immediate challenges of the pandemic.
Rather, said Franco, the currency climate has opened the door to modernize and optimize in ways that can help the company scale well into the future, and data remains at the heart of that effort.
“The role of the CFO is to provide strategic leadership to the company using financial data that the finance organization has access to,” he said. “Having the right data and tools to underpin those decisions is critical, and getting access to that accurate, integrated data in real time is really critical to making those decisions.”